Health Coverage Tax Credit (HCTC)

Transcription

1 Health Coverage Tax Credit (HCTC) Congress created the HCTC Program as part of the Trade Adjustment Assistance Act of It was established to assist with the cost of health care for: Workers who lose their jobs due to foreign trade Retirees whose pension is trusteed by the Pension Benefit Guaranty Corporation (PBGC) The HCTC is available to workers who: 1. Meet Initial Requirements: Trade Affected (TAA, ATAA or RTAA certified by the US Department of Labor) Pension Benefit Guaranty Corporation (PBGC) Recipient 2. Meet General Requirements: Not enrolled in Medicare Not claimed as a dependant on another person s Federal tax return Are enrolled in a Qualified Health Plan: COBRA State-Qualified Health Plans Spousal Coverage Non-group / Individual Health Plan

2 Health Coverage Tax Credit (HCTC) Family members of eligible individuals may also be covered if they, Do not receive Medicare benefits Are claimed as a dependant on the participant s federal tax return Are also enrolled in a qualified health plan Eligible individuals can collect the credit in one of two ways: Monthly The Monthly HCTC allows workers to receive monthly assistance in paying health care premiums. Enrolled individuals are responsible for sending a 20% payment to the HCTC Program/IRS. The HCTC Program/IRS then adds its 80% contribution, and sends the 100% payment to the health plan. Yearly The Yearly HCTC allows workers to receive the tax credit when they file their Federal tax return.

3 Health Coverage Tax Credit (HCTC) The Monthly program allows participants to receive monthly assistance in paying health care premiums. IRS receives record of eligibility & sends program kit Individual enrolls in Monthly program IRS invoices enrolled individual for 20% of qualified health premium Enrolled individual submits payment to IRS Repeating Monthly Process IRS adds 80% contribution and sends 100% payment to health plan

4 Health Coverage Tax Credit (HCTC) HCTC is developing streamlined procedures specifically for Delphi retirees to ease the current registration process. This requires a strong partnership with Delphi, the Pension Benefit Guarantee Corporation and the third party administrator of the VEBA. Information will be communicated to you as it becomes available. Meanwhile, if you have any questions about the tax credit, please: Visit the HCTC website (keyword/search: HCTC) Contact the HCTC Customer Contact Center HCTC ( ) (TDD/TTY)

5 Appendix

6 A Tax Credit it Pays to Know About! An Overview of the Health Coverage Tax Credit Program 6

7 Agenda HCTC Overview How the HCTC Works What s New about the HCTC Your Role & Support Material For You Questions 7

8 HCTC Overview Congress created the HCTC Program as part of the 2002 Trade Act. It was established to help cover the cost of health care for: Workers who lost their jobs due to foreign trade Retirees whose pensions were taken over by the Pension Benefit Guaranty Corporation (PBGC) 2002 Today Economic Situation Annual 65% HCTC Created & Administered Monthly HCTC Registration & Administration Continued Operational Improvements Greater Need and Ability for Us to Partner! Rising Cost and Availability of Health Care Expanded Legislation Today s environment requires a stronger partnership and increased coordination between the HCTC Program and its stakeholders. 8

9 HCTC Overview The HCTC is available to individuals who: STEP 1 Meet Initial Requirements: Pension Benefit Guaranty Corporation (PBGC) Recipient (Age 55-64) Trade-Affected (TAA, ATAA or RTAA certified) STEP 2 Meet General Requirements: Not enrolled in Medicare Not claimed as a dependant on another person s federal tax return STEP 3 Are enrolled in a Qualified Health Plan: COBRA State-Qualified Health Plans Spousal Coverage Non-group / Individual Health Plan 9

10 HCTC Overview The HCTC can also pay for health coverage for participants family members. Qualified family members: Do not receive Medicare benefits Are claimed as a dependant on the participant s federal tax return Are enrolled in a qualified health plan 10

11 How the HCTC Works The monthly program allows participants to receive monthly assistance in paying health care premiums. Complete the registration form Repeated Monthly HCTC Process for Participants Pays 20% IRS Adds 80% As a reminder: Invoice dates change month to month Payment must be received in order for the IRS to add 80% Health Plan Receives 100% 11

12 How the HCTC Works The yearly HCTC allows eligible individuals to receive the tax credit upon filing their federal tax return. Individual Files Annual Tax Return & Form 8885 Yearly HCTC Process Individual Submits Proof of Payment and Insurance IRS Accepts Tax Return $$$ Individual Receives Payment or Credit Against Taxes 12

13 What s New The Recovery Act* changed the HCTC: Greater Portion of Health Coverage Cost Paid Reimbursement for Payments Made During Enrollment Extended Coverage for Qualified Family Members COBRA Benefits Extended COBRA Subsidy Considerations *The legislation that changed the HCTC expires on December 31,

14 What s New The HCTC now pays a greater portion of health coverage costs. The tax credit has increased from 65% to 80% of qualified health insurance premiums for all current and new HCTC participants, regardless of TAA petition date. Began in May

15 What s New Participants can receive a credit for premiums paid during enrollment. Participants who made payments for qualified health insurance in 2009 while enrolling in the monthly program can receive a credit on their HCTC account. This change reimburses participants for the up-front out-ofpocket expenses for health insurance. Example: If an individual pays 100% of their invoice for one month, they will not have to make another payment for four months. Beginning in August

16 Qualified family members may continue receiving the HCTC for up to 24 months. What s New Qualified family members will be able to receive the HCTC even after the primary eligible individual s: Enrollment in Medicare Divorce Death Beginning in January

17 What s New COBRA benefits have been extended for HCTC eligible individuals. TAA, ATAA and RTAA recipients can receive COBRA for as long as they continue to meet the definition of eligible individuals. In the event of the recipient's death, their surviving spouse and dependents can receive COBRA for an additional 24 months. Employers are responsible for extending COBRA benefits for these individuals. 17

18 What s New The Recovery Act established a new, completely separate 65% COBRA Premium Reduction. Individuals who are involuntarily separated from their jobs on or after September 1, 2008 are eligible to receive the premium reduction. If an individual receives a 65% COBRA Premium Reduction through their former employer, the individual will not be eligible to receive the HCTC during that same month.* * However, if the individual becomes HCTC eligible, they can opt out of the 65% COBRA Premium Reduction to receive the 80% tax credit. 18

19 Appendix Qualified Health Plans Individuals must be enrolled in one of four qualified health plans to receive the HCTC: 1 COBRA 2 State-Qualified Health Plans 3 Spousal Coverage 4 Non-Group/Individual Health Plan 19

20 Appendix Qualified Health Plans 1 COBRA Employers may offer individuals COBRA when they leave their jobs COBRA coverage usually lasts 18 months, but due to recent legislation, TAA, ATAA and RTAA recipients can receive COBRA for as long as they continue to meet the definition of HCTC-eligible individuals The individuals former employer may not pay more than 50% of the total premium 20

21 Appendix Qualified Health Plans 2 State-Qualified Health Plans State Iowa Illinois Indiana Kansas Michigan Minnesota Missouri Nebraska Ohio Wisconsin Health Plan HIPIOWA Illinois Comprehensive Health Insurance Plan (ICHIP) administered by BlueCross BlueShield of Illinois Anthem Blue Cross Blue Shield Indiana Comprehensive Health Insurance Association (ICHIA) Kansas Health Insurance Association Blue Cross Blue Shield of Michigan Minnesota Comprehensive Health Association (administered by Medica) Missouri Health Insurance Pool (MHIP) State-Based Continuation Coverage Nebraska Comprehensive Health Insurance Pool (CHIP) administered by BlueCross BlueShield of Nebraska State-Based Continuation Coverage Anthem Blue Cross Blue Shield Kaiser Permanente State-Based Continuation Coverage BadgerCare Plus Benchmark State Based Continuation Coverage 21

22 Appendix Qualified Health Plans 3 Spousal Coverage Individuals may enroll in group coverage through their spouse s employer The employer of the individuals spouse may not pay more than 50% of their health plan premium 4 Non-Group/Individual Health Plan A non-group/individual health plan covers one person or family and is purchased directly from an insurance company, agent, or broker Coverage must take effect at least 30 days before the individual s last day of paid work 22